Abolition of the ESA Work-Related Activity Component …

The Welfare Reform and Act 2016 legislated for the abolition of the Work-Related Activity Component (WRAC)of ESA for new claimants from April 2017. Based on 2016-17 rates, this equates to a reduction of 29.05 a week for claimants in the Work-Related Activity Group (WRAG). Alongside this, the Government announced "new funding for additional support to help claimants return to work"

ESA is an "income replacement" benefitfor people who have a health condition or disability which limits their ability to work. As of February 2016 there were around 2.4 million ESA claimants in Great Britain, including450,000 in the Work-Related Activity Group.

There are two forms of ESA:

Income-related ESA will be replaced by Universal Credit; contributory ESA will remain as a separate benefit. The Government currently expects the introduction of Universal Credit to be fully complete by 2022.

A person must undergo a Work Capability Assessment to be eligible for ESA. There are three possible outcomes of a Work Capability Assessment;

Following the assessment, successful ESA claimants receive a standard rate plus an additional amount.

The standard rate of ESA is currently 73.10 a week, plus either:

These additions are known as the Support Component and the Work-Related Activity Component, respectively.

In the Summer Budget 2015, it was announced that the Work-Related Activity Component paid to those in the WRAG would be abolished for new claims from April 2017. The equivalent element in Universal Credit will also be abolished. This will be a reduction of 29.05 a week (based on 2016-17 rates) and aligns the rate of payment with those claiming Jobseekers Allowance (2016-17 rate: 73.10 a week). Existing claimants will not be affected, while there will be protections for those who may move into the WRAG or Universal Credit equivalent from the Support Group.

The changes were introduced to remove the financial incentives that could otherwise discourage claimants from taking steps back to work. 640 million a year of savings were initially forecast by 2020-21; this was later revised to 450 million a year.

The changes were widely criticised by disabled charities. The idea that the WRAC incentivises claimants to not look for work has been particularly disputed.

The proposals were opposed by opposition parties. Amendments to retain the component (and equivalent in Universal Credit) were tabled and agreed at the Lords Report Stage of the Welfare Reform and Work Act 2016. The Lords vote followed the publication ofa review initiated by Members of the House of Lords and supported by disability charities; the "Halving the Gap?" review. The review recommended that theGovernment should not proceed with the removal of the Work-Related ActivityComponent.

These amendmentswere overturned by the Commons. A further amendment requiring the Government to provide analysis of the impact of the changes before introducing them was also proposed by the Lords, and subsequently overturned by the Commons.

Alongside the changes to the WRAC was an announcement to provide new funding for additional support to help claimants return to work. The Government has since announced a series of measures and funding to deliver this, including;

60 million per year rising to 100 million per year for practical employment support, including an additional 15 million in 2017-18 directed at the local Jobcentre PlusFlexible Support Fund, to be set asidespecifically forthose with limited capability to work

Further detail of the additional employment support has been set out in the Government's October 2016 Green Paper, Improving Lives. This was published instead of a previously announced White Paper.

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Abolition of the ESA Work-Related Activity Component ...